This will mean up to GBP 1,000 in interest from lending will be tax free from April 2016. The tax break will not apply to income from investments in shares or funds. Higher rate taxpayers’ allowance will be set at GBP 500.
In last years Budget, the Chancellor unveiled that the government would make peer-to-peer loans eligible for inclusion within ISAs. An estimated GBP 1.7 billion was lent in 2014 through P2P lenders.
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